The Accumulation/Distribution (A/D) Indicator is a volume-based technical analysis tool developed by Marc Chaikin. It helps traders evaluate whether an asset is being accumulated (bought) or distributed (sold) by combining price movement with trading volume—a powerful way to assess the strength or weakness behind a trend.

How It Works
The A/D indicator calculates a Money Flow Multiplier (MFM) based on where the close sits within the candle’s high-low range.
That multiplier is then used to generate a Money Flow Volume (MFV) by multiplying it with the candle’s volume.
The result is added to a running total, producing the A/D line—a cumulative signal of money flow over time.

How to Interpret It
A rising A/D line means more money is flowing into the asset → suggests bullish pressure.
A falling A/D line shows money is flowing out → suggests bearish pressure.
If the price is rising but the A/D line is falling, or vice versa, this divergence can be an early warning of a potential reversal.

Why Use It in FX Replay
Spot early momentum shifts before price reacts
Validate breakout or breakdown strength by comparing volume-based flow
Combine with price action or market structure to confirm trend continuation or weakening
The A/D line is especially valuable in backtesting when you want to understand whether institutional volume is aligning with price moves—a key insight for any strategy rooted in Smart Money Concepts or volume dynamics.

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